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Study asks Australian organisations: where the bloody hell are your IT assets?

  • 04 June, 2008 08:38

<p>Organisations across Australia and New Zealand have little or no idea of the true value of their IT assets and the contribution those assets make to the business, according to a study commissioned by leading enterprise application management and modernisation solution provider, Micro Focus.</p>
<p>The Recognising the True Value of Software Assets report[1] revealed almost two thirds (62 per cent) of respondents never try to quantify the financial value of their IT assets, while 70 per cent do not measure the contribution IT makes to the business. Keith Mante, Country Head, Australia, Micro Focus, warns this lack of knowledge is leaving CIOs exposed, ensuring IT continues to be seen as an expense that can be minimised, rather than an asset to be harnessed.</p>
<p>“That close to three quarters of organisations in Australia and New Zealand do not measure IT’s input is a real concern,” says Mr Mante. “Not only are we failing to measure the value of IT, only a 13 per cent of surveyed organisations had any confidence their assessments were correct. Given how notoriously difficult it can be for CIOs to build effective cases for IT investment, the current approach should be ringing alarm bells for CIOs throughout the region.”</p>
<p>The survey results follow similar research carried out by Micro Focus in Europe and the US, in October 2007, which revealed CIOs and CFOs in those regions were also largely ignoring the size and value of their IT assets, compared to other regularly measured corporate assets such as cash, brand, property and intellectual property.</p>
<p>Mr Mante says local organisations should take no comfort from the fact they are stumbling over the same issues as other markets.</p>
<p>“Our European and American companions are not too different from us and frankly, there’s no excuse for any organisation not to know the value of IT and what it’s bringing to the business,” he says. “The technology exists to measure core software assets and, unless we start treating this issue with the attention it deserves, IT projects are going to be severely challenged in the future.”</p>
<p>IT and finance executives from a range of industries were surveyed in Europe, the US, Australia and New Zealand. Respondents from each region were asked the same questions. This latest research paints a mixed picture for Australia and New Zealand, with less than half (46 per cent) of IT executives claiming to know the size of their core software assets. This figure is well below Germany (60 per cent) and America (52 per cent); in fact, close to a fifth (19 per cent) of A/NZ organisations did not even know the answer to this question.</p>
<p>On the upside, Australian and New Zealand organisations are far more knowledgeable about how much they spend on core software assets, with 94 per cent reporting they knew their annual expenditure on IT assets. However, the level of confidence displayed in this knowledge differed substantially between finance and IT executives, with 40 per cent of IT executives indicating they were very confident in this figure, compared to just 12 per cent of finance executives.</p>
<p>“While it’s encouraging to see we can attribute a figure to the level of spending on IT assets, local organisations don’t actually know how these assets are contributing to the business,” Mr Mante says. “Yet, 58 per cent of organisations consider core software assets to be critical to their organisations’ strategy. Without knowing why these assets are critical, how can CIOs be expected to plan, execute and manage worthwhile IT projects? By the same token, how can CFOs approve IT budgets if IT is unable to demonstrate the value these core software assets offer?”</p>
<p>Tools which measure an organisation’s core software assets are available globally. Micro Focus has two products in its Application Portfolio Management suite, both of which provide organisations with an assessment of disparate IT systems and the gap analysis needed to plan and implement integration of operations. Rapid Assessment gives customers a snapshot of their IT assets in less than a month, while Enterprise View offers a more in-depth analysis over a longer period.</p>
<p>Key data</p>
<p>- Almost two thirds (62 per cent) of respondents never try to quantify the financial value of their IT assets.</p>
<p>- 70 per cent do not measure the contribution IT makes to the business.</p>
<p>- 76 per cent of Australian and New Zealand organisations said they do not quantify the non-financial value of core IT assets. This response rate was only exceeded by Italian executives (79 per cent), while the US fared better with 32 per cent indicating they measured these non-financial values.</p>
<p>- More than half (56 per cent) of the surveyed executives across the A/NZ region said they did not quantify the overall value of their IT assets. This was significantly lower than our US counterparts, 70 per cent of which did not measure the value of those assets.</p>
<p>- 58 per cent of respondents in this region said core software assets were very critical to their organisation’s strategy.</p>
<p>- Only six per cent of Australian and New Zealand executives stated they didn’t not know their annual expenditure on the their organisation’s core software assets.</p>
<p>About Micro Focus
Micro Focus provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization and Management software enables customers’ business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit</p>
<p>Micro Focus is a registered trademark of Micro Focus. All other products and companies mentioned in this announcement are the trademarks of their respective owners.</p>
<p>[1] Research undertaken by Coalface Research, an operational division of Launch Pad Marketing</p>

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